Per new research, the typical worker in the UK would need half a century of salary to reach the net worth of the richest 10% of the population.
Widening Wealth Gap Across Decades
The study analyzed financial assets statistics covering the Covid pandemic period and determined that in the mid-2000s, it would have required nearly four decades of average worker salary to enter the wealthiest decile of the wealth distribution.
An economic expert associated with the report observed: "Wealth gaps in Britain are now so large that a regular employee saving all their earnings throughout their career would remain unable to achieve the peak of the wealth ladder."
Measuring the Economic Gap
The study revealed that the disparity between the net worth of the median citizen and an individual in the wealthiest decile was £1 million in 2006-08, but had expanded to £1.3m in actual value by 2020-22.
The economist continued: "These differences are doubly concerning as economic movement in Britain is limited – people that start life wealthy tend to continue being rich, and vice versa."
Proportional Economic Disparity
Despite the economic divide expanding in actual numbers, the percentage of total wealth in the UK held by the richest households – termed "relative wealth inequality" – has been "mostly consistent since the eighties," per the analysis.
During this period, complete net worth in the UK surged from triple the annual GDP, to approximately 7.5x.
Factors of Economic Disparity
So-called "passive" increases, via rising house prices and adjustments to retirement fund assessments, were the primary factors of the expanding economic divide since 2010, according to the report.
These gains tended to accrue to older, property-owning households, the analysis reveals – worsening the generational financial disparity.
Generational Wealth Disparities
The typical financial disparity between thirty-somethings and sixty-somethings increased over twofold in inflation-adjusted terms, from £135k in the mid-2000s, to 310 thousand pounds.
Area-Based Differences
Additionally, there were pronounced regional variations, with the median value of assets in recent years standing at £290k in the SE of England, where housing costs have tended to rise rapidly, as opposed to £110k in the NE of England.
COVID Era Impact
Throughout the COVID period, when numerous employees were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns reduced expenditure possibilities, the statistics indicate numerous families were in a position to set aside money, growing their net worth.
Wealthier families performed significantly better, though. "The typical family in the lowest-income quintile saw their cash reserves increase by just £80 during the COVID years (2019-20 to 2021-22), broadly the same as the two years pre-pandemic. In contrast, the median home in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the study reveals.
